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must the plan trustee sign?


K2retire

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We have been asked to draft plan termination paperwork for a single participant profit sharing plan for a sole proprietorship. Years ago when the plan was established a corporate trustee was named. Although the plan appears to have been amended and restated on a timely basis, the plan sponsor has had no contact with the corporate trustee for many years and would like to terminate the plan without involving them any further.

I know that the employer has the authority to terminate the plan. I believe that there will be no problem with having the assets distributed, as they are no longer held at the bank that is the trustee. Other than notifying the trustee that the plan is terminated, is there a requirement that the trustee sign off on the resolution?

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I don't know. I'm still waiting on delivery of the EGTRRA document and amendments to verify if the history that was explained to me is accurate. That the bank trustee would have signed a document prepared by the new recordkeeper, without having control of the assets does seem odd.

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Why wouldn't the employer just remove the Trustee and appoint a new one?

Exactly. The time spent trying to figure it out is more than the time to just name a new trustee. The fact that the assets are held elsewhere implies that something is messed up anyway.

Ed Snyder

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